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Nuveen, a TIAA Company

PRI reporting framework 2020

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You are in Direct - Fixed Income » ESG incorporation in actively managed fixed income » (B) Implementation: Thematic

(B) Implementation: Thematic

FI 07. Thematic investing - overview

07.1. Indicate what proportion of your thematic investments are (totalling up to 100%):

79 %
19 %
2 %

07.2. Describe your organisation’s approach to thematic fixed income investing

The taxable fixed income funds -Social Choice Bond, Social Choice Account, Nuveen Green Bond Fund and Nuveen Short Duration Impact Fund – have impact objectives as part of the investment strategy. The  impact objectives are guided by Nuveen’s proprietary impact framework  in which the strategy seeks to invest in securities with direct and measureable environmental and social outcomes alongside competitive risk-adjusted returns. The impact framework includes four themes: Renewable Energy & Climate Change, Natural Resources, Affordable Housing and Community & Economic Development. Investment eligibility is based on criteria developed by the Responsible Investment team in collaboration with the fixed income investment team and approved by the Corporate Governance and Social Responsibility Committee of the TIAA Board of Directors. Security selection is at the discretion of the portfolio management team according to the impact framework guidelines and period review is conducted by the Responsible Investing team. Impact information is captured directly from the issuer on a regular basis in alignment with Nuveen’s proprietary impact framework. We regularly engage with issuers to help structure impact opportunities and increase impact disclosure. 

07.3. Additional information [OPTIONAL]

FI 08. Thematic investing - themed bond processes

08.1. Indicate whether you encourage transparency and disclosure relating to the issuance of themed bonds as per the Green Bonds Principles, Social Bond Principles, or Sustainability Bond Guidelines..

          see additional information below.

08.2. Describe the actions you take when issuers do not disburse bond proceeds as described in the offering documents.

As part of a periodic review process for taxable fixed income impact strategies, the Responsible Investing team confirms eligibility of all impact securities to ensure alignment with our proprietary impact framework. If documentation of eligibility cannot be found, the Responsible Investing team works with the portfolio management team to reach out to the relevant issuer(s) for further information. If the issuer’s response suggests that the security ultimately does not align with the impact framework, it is recommended that the portfolio management team reclassifies the security or sell the position as market conditions allow.

In addition, the Responsible Investing team gathers impact data on an annual basis for taxable fixed income impact strategies and publishes a public facing impact report. As part of this process, the team engages with issuers on increasing impact disclosure best practice. View the 2019 impact report here:

08.3. Additional information. [Optional]

Nuveen’s proprietary impact framework for taxable fixed income strategies is aligned with the Green Bond Principles, requiring transparency and disclosure for labeled green bonds. We also encourage issuers of unlabeled green bonds and other thematic bonds classified under the impact framework to follow these best practices as much as possible. As market standards evolve, we will continue to engage issuers to increase transparency and disclosure over time.

We have been a pioneer in the green bond market since 2007. We also frequently invest in unlabeled green bonds, as long as they meet the environmental and/or social criteria for our proprietary impact framework. We are among the top 3 largest green bond investors in the market according to Bloomberg as of December 2019, holding over $3.4 billion in green bonds across the firm. Within the framework, the Renewable Energy & Climate Change and Natural Resources themes align well with both labeled and unlabeled green bond investment, while the Affordable Housing and Community & Economic Development themes align with social bond investment. In addition, we were represented on the initial Executive Committee of the Green Bond Principles, and have participated in standard-setting process of the Climate Bonds Initiative, S&P, and Moody's.

FI 09. Thematic investing - assessing impact

09.1. Indicate how you assess the environmental or social impact of your thematic investments.

09.2. Additional information. [Optional]

We require annual impact reporting for labelled green, social and sustainability bonds and encourage issuers of unlabelled thematic bonds to follow these best practices as much as possible. For unlabelled bonds, we may reach out to the issuer to seek post-investment disclosure of impact metrics aligned to the project type (e.g. for our renewable energy and climate change investments, we would request CO2 emissions avoided or renewable energy generation produced). Our approach recognizes that impact reporting methodologies are nascent for many thematic investments; therefore, we use engagement as a mechanism to help encourage best practice over the course of the investment.

We published our third impact report in 2019 for Nuveen’s taxable fixed income impact investment strategies.  Over the past three years we have advanced and expanded our impact reporting practices to include new information of interest to clients. For example, in this year reports we included impact metrics by geography. The impact summary is publicly available at: 

Note: the above reflects practices for impact investments in our taxable fixed income strategies given these strategies make up the majority of impact investment AUM in fixed income.